Last week's issue of Marketing Week (17 December 2009) has a fairly lengthy report on Procurement, entitled 'Keep your eyes on the price'.
It starts off with how Marketing often see Procurement as the enemy. But there is a balanced view from the people that were interviewed including Julie Constable who does some work with the MCCA, and I worked with at AAR a few years ago.
If anyone wants any more detail on the article, just drop me an email. I hesitate to waste my time typing up more press about us but maybe one day, there will be less articles on our role and more centred and written from the general acceptance of our role.
New Year's resolution perhaps - that we all aim to get the positive PR machine rolling in 2010 !
22 December 2009
17 December 2009
Stars and Stripes
Back from my trip to New York New York!. I had a meeting with a global network agency to kick off a clients' 2010 fee negotiations and also met up with a TV Post Production company.
The scale of the clients spend in the US is absolutely massive - you are talking total COI spend multiplied a few times. I also get the impression (and forgive me if I am wrong) that as a market they are less developed in the way that they deal with procurement. The chaps at the TV Post Production company said that as the scale is so huge the agency heads are calling the shots, and in one agency that could be the Head of Account Management, Head of Creative and Head of TV - three Heads for one account. What chance do Procurement have?
But of course, there is the view of the agency - earlier this month, Ogilvy’s Head of Northern America, John Seifirt, in a memo to staff announcing 90 redundancies blamed client cost-cutting and the role of procurement departments for the structural changes being forced on agencies, including his own. No responsibility back on the agency then to cut their cloth in terms of economic hardship then!
The scale of the clients spend in the US is absolutely massive - you are talking total COI spend multiplied a few times. I also get the impression (and forgive me if I am wrong) that as a market they are less developed in the way that they deal with procurement. The chaps at the TV Post Production company said that as the scale is so huge the agency heads are calling the shots, and in one agency that could be the Head of Account Management, Head of Creative and Head of TV - three Heads for one account. What chance do Procurement have?
But of course, there is the view of the agency - earlier this month, Ogilvy’s Head of Northern America, John Seifirt, in a memo to staff announcing 90 redundancies blamed client cost-cutting and the role of procurement departments for the structural changes being forced on agencies, including his own. No responsibility back on the agency then to cut their cloth in terms of economic hardship then!
09 December 2009
Let’s Play Ball!
I am just about to fly over the water and came across this blog by an agency in the US. They are called Mad 4 Marketing - what a great name. They have posted a blog following the infamous Ad Age article and the summary of it is "Let’s Play Ball!”. They agree with some comments that people have raised in this blog - "it’s an educational process. Business development people should be including procurement leaders in their outreach. As previously mentioned, 90% do not have marketing backgrounds and would benefit from being part of ongoing dialogue".
Click here for the whole blog. It is nice to see a positive and proactive view of the way forward.
P.S. not sure about the 90% stat!
Click here for the whole blog. It is nice to see a positive and proactive view of the way forward.
P.S. not sure about the 90% stat!
07 December 2009
Is there a theme emerging ?
I did a talk tonight to the Pimento agencies. They are a network of individual and specialised agencies who run separately and also together under the Pimento umbrella - expertly managed by Stephen Knight and Isabelle Beauquin.
They were really interested in hearing about the role of client procurement and I got onto my favourite soapbox of the month, please support / accept and work with client procurement.
The main two issues that they raised (and I think that they have a point) is:
They were really interested in hearing about the role of client procurement and I got onto my favourite soapbox of the month, please support / accept and work with client procurement.
The main two issues that they raised (and I think that they have a point) is:
- All too often in tender processes, procurement are faceless and you cannot interact with them (this was brought up at the Iris procurement breakfast as well)
- Does an e auction work for marketing services ? (I like e-tendering as it reduces the amount of paper used in a RFP process but think it is very hard to use e -auctions for services - goods with a fixed specification - yes)
I know it is hard to talk to suppliers during any procurement process but in an area such as the one that we work in (marketing), as Bob Hoskins used to say in the old BT adverts "it is good to talk". Positive client - agency - procurement dialogue is productive when it works well.
04 December 2009
Is that a glimmer of hope I see?
In this week's issue of Supply Management (page 8), there may be some light at the end of the tunnel.
Ray Jones, who is head of communications at the Chartered Institute of Marketing said and I quote "the onus is on marketers to appreciate the value buyers can add to their projects. It is up to us to keep up to date with business and to be numerate enough to work closely with procurement to prove there is a good return on investment".
Sounds great. Now they just need to communicate that to their membership and all the marketeers in the UK maybe the world that have a block about engaging with their procurement teams. Here's hoping.
Ray Jones, who is head of communications at the Chartered Institute of Marketing said and I quote "the onus is on marketers to appreciate the value buyers can add to their projects. It is up to us to keep up to date with business and to be numerate enough to work closely with procurement to prove there is a good return on investment".
Sounds great. Now they just need to communicate that to their membership and all the marketeers in the UK maybe the world that have a block about engaging with their procurement teams. Here's hoping.
02 December 2009
Is this answer to the ' can we measure ROI' question?
Mike from CIPS has forwarded me this press release from the COI on how they are looking to put a common approach in place to calculate the financial effectiveness and efficiency of public sector marketing.
The paper shows that the 1998-2005 Teacher Recruitment campaign not only paid for itself; but should provide returns of another £85 for every £1 spent. While the Tobacco Control campaign, is estimated to have saved the economy £7.1bn; against an advertising spend of £49.3m between 1999-2004.
The paper proposes a series of universal definitions to ensure practitioners adopt the same terminology and outlines a 10-step process to help government communicators determine sensible and robust estimates of Payback - the absolute financial benefit delivered by marketing - and Return on Marketing Investment (ROMI) - the number of pounds of Payback delivered, less the cost of the marketing - for every pound spent. It also provides six key principles that should underpin this.
Here is a link to the PDF on the COI website - click here.
The paper shows that the 1998-2005 Teacher Recruitment campaign not only paid for itself; but should provide returns of another £85 for every £1 spent. While the Tobacco Control campaign, is estimated to have saved the economy £7.1bn; against an advertising spend of £49.3m between 1999-2004.
The paper proposes a series of universal definitions to ensure practitioners adopt the same terminology and outlines a 10-step process to help government communicators determine sensible and robust estimates of Payback - the absolute financial benefit delivered by marketing - and Return on Marketing Investment (ROMI) - the number of pounds of Payback delivered, less the cost of the marketing - for every pound spent. It also provides six key principles that should underpin this.
Here is a link to the PDF on the COI website - click here.
First blog article revisited
There is an article on the Procurement Leaders website blog about that Ad Age article that I mentioned in my first blog and the influence of procurement, States side. Click here for the article.
What is interesting is that Jonah Bloom, the Editor of Advertising Age hits back and explains the rationale behind his view on the impact of procurement on agencies revenue.
The best quote in the article is 'The squeeze in fees that the advertising industry is experiencing is as a result of better communication between marketing and procurement, not worse'. I think that this is true as the relationship between marketing and procurement is constantly improving.
The sector that I see that 'gets' procurement is Media. I am often asked to do training for the media agencies and support on key tenders. As buyers themselves, I think that they get it and understand and appreciate their role in a tender/pitch situation. The sector that really doesn't get procurement is Design. They really struggle to see how Procurement can put a value on creativity. My advice to any design agency that approaches me - is to help then, help educate the value of your output and work with procurement to get a solution in place that all three parties (including the Brand / Design person) are happy with.
What is interesting is that Jonah Bloom, the Editor of Advertising Age hits back and explains the rationale behind his view on the impact of procurement on agencies revenue.
The best quote in the article is 'The squeeze in fees that the advertising industry is experiencing is as a result of better communication between marketing and procurement, not worse'. I think that this is true as the relationship between marketing and procurement is constantly improving.
The sector that I see that 'gets' procurement is Media. I am often asked to do training for the media agencies and support on key tenders. As buyers themselves, I think that they get it and understand and appreciate their role in a tender/pitch situation. The sector that really doesn't get procurement is Design. They really struggle to see how Procurement can put a value on creativity. My advice to any design agency that approaches me - is to help then, help educate the value of your output and work with procurement to get a solution in place that all three parties (including the Brand / Design person) are happy with.
30 November 2009
Is it time to review how agencies are paid?
I have just read on Brand Republic that the UK Gym chain LA Fitness have signed a four-year profit-sharing deal with the celebrity Alesha Dixon. Her fee will be based on the success of LA Fitness over the four year contract period. It is rumoured that the highest amount (rumoured to be £3m) she could earn is three times bigger than the lowest fee (assume that this is a £1m).
I really like this reward and risk payment and I suppose in one way, that is why the old commission system work. If a piece of advertising works, then it runs and runs, and all the agencies involved in creating that advertising, benefit in the long term.
The key phrase there being long term. Perhaps it is a good time to start thinking about the current commercial models that are in place and see if there are ones that can financially reward all parties involved. What do you think?
I really like this reward and risk payment and I suppose in one way, that is why the old commission system work. If a piece of advertising works, then it runs and runs, and all the agencies involved in creating that advertising, benefit in the long term.
The key phrase there being long term. Perhaps it is a good time to start thinking about the current commercial models that are in place and see if there are ones that can financially reward all parties involved. What do you think?
29 November 2009
Thursday part 2
I presented at the MandM Briefing on Thursday afternoon on Advertising strategies for the upturn. My fellow presenters were Guy Abrahams from ZenithOptimedia, Peter Walshe from Millward Brown and Nick Manning from Ebiquity. It was very well attended and we had a very panel discussion on topics such as measuring ROI, whose role is it to put measurement in place and the role of new technology in the media mix.
My bit was on the trends in the media world from a procurement / client viewpoint. I said that it was mainly focused on 2 key trends: Procurement is here to stay and (more) focus on Openability (not sure that is a real word!) and Accountability.
I thought that the whole briefing and panel discussion were good as procurement were seen as equals in the discussion topics and really able to contribute to the what is the future of advertising and advertsing budgets, and what we can do to help.
Copies of the presentations can be seen on http://mandmglobal.com/content/SocialNet/adknowledge/147896541236987453/198605334
My bit was on the trends in the media world from a procurement / client viewpoint. I said that it was mainly focused on 2 key trends: Procurement is here to stay and (more) focus on Openability (not sure that is a real word!) and Accountability.
I thought that the whole briefing and panel discussion were good as procurement were seen as equals in the discussion topics and really able to contribute to the what is the future of advertising and advertsing budgets, and what we can do to help.
Copies of the presentations can be seen on http://mandmglobal.com/content/SocialNet/adknowledge/147896541236987453/198605334
27 November 2009
Danish Pastries and Bacon Baps
Good turnout at the Iris Procurement Breakfast with very generous breakast choices ( I just had the fruit!).
Jane Dormer (Head of GB Procurement at Coca Cola) said that agencies should always look to invite their procurement clients into the agencies as soon as they are aware of the procurement person so they can understand the agency and what they are doing for the client. Totally agree. It happens as soon as a new Marketing person is appointed but not when Procurement are appointed (and we won't just look at the chocolate biscuits!).
She also touched on the new value compensation model that Coke have been rolling out globally and have just started to discuss with their UK agencies. It is about paying agencies on output / on their deliverables with zero profit. There is then a performance payment based on agreed measurement. This can be up to 30% of the agreed output level, and there are upper and lower limits on the output. I quite like the concept of paying by output and have worked with a few agencies that have used this model. My only observation is that it is the client 'dictating' the value of the output when all agencies work differently and is this bringing a degree of uniformity and standardisation into the commercial model ? Good food for thought though.
Tony Spong (Head of DM, SP & Integration (I think that is his title sorry Tony if it is not) from AAR) discussed the fact that a pitch is always a good time for the client to have a 'clear out from their garage' and use the pitch process and time to review how they work as a client. I really liked this idea as procurement can really help to evaulate ways of working and processes to make them more effectively and utlimately more efficient for all parties.
At Orange I worked with our contract publishing company - John Brown, to look at one page of amends and the costs that we had incurred. I then sent this information around to the marketing team for them to see. They could see that just by changing one word - what the impact on the timescales and the cost of doing that was. Quite powerful information.
Jane Dormer (Head of GB Procurement at Coca Cola) said that agencies should always look to invite their procurement clients into the agencies as soon as they are aware of the procurement person so they can understand the agency and what they are doing for the client. Totally agree. It happens as soon as a new Marketing person is appointed but not when Procurement are appointed (and we won't just look at the chocolate biscuits!).
She also touched on the new value compensation model that Coke have been rolling out globally and have just started to discuss with their UK agencies. It is about paying agencies on output / on their deliverables with zero profit. There is then a performance payment based on agreed measurement. This can be up to 30% of the agreed output level, and there are upper and lower limits on the output. I quite like the concept of paying by output and have worked with a few agencies that have used this model. My only observation is that it is the client 'dictating' the value of the output when all agencies work differently and is this bringing a degree of uniformity and standardisation into the commercial model ? Good food for thought though.
Tony Spong (Head of DM, SP & Integration (I think that is his title sorry Tony if it is not) from AAR) discussed the fact that a pitch is always a good time for the client to have a 'clear out from their garage' and use the pitch process and time to review how they work as a client. I really liked this idea as procurement can really help to evaulate ways of working and processes to make them more effectively and utlimately more efficient for all parties.
At Orange I worked with our contract publishing company - John Brown, to look at one page of amends and the costs that we had incurred. I then sent this information around to the marketing team for them to see. They could see that just by changing one word - what the impact on the timescales and the cost of doing that was. Quite powerful information.
25 November 2009
The replacement to Kelly's Directory
Went to the AAR End of Year Drinks party last night. It was great to see Kerry and Paul and lots of agency folk there.
Companies such as AAR (The Haystack Group and Creative Brief being the other two ones that I would also recommend) play an invaluable role in helping procurement and marketing know and keep up to date with the very complex and every changing agency market. Years ago (before the good old internet) I had to rely on Kelly's Directory (hands up who remembers that?). As Procurement we work alongside the process that they bring in managing all the commercial and contract elements of a pitch.
Companies such as AAR (The Haystack Group and Creative Brief being the other two ones that I would also recommend) play an invaluable role in helping procurement and marketing know and keep up to date with the very complex and every changing agency market. Years ago (before the good old internet) I had to rely on Kelly's Directory (hands up who remembers that?). As Procurement we work alongside the process that they bring in managing all the commercial and contract elements of a pitch.
23 November 2009
Malaysia - our fame is spreading
Just seen an article from the Malaysia press (http://biz.thestar.com.my/news/story.asp?file=/2009/11/21/business/5138912&sec=business)
Quite an interesting viewpoint from the author - Paul Loosley, with 2 paragraphs that stood out for me - shown below. Interesting re his view of the ad agencies and one I have to say that I do agree with. But re the 2nd extract I don't want this blog to become a listing of all the negative press that marketing procurement get but it is funny that it seems the world over, the view is similar. Let's spread the positive word - we can help and we can make a difference (sermon over with !)
"Due to market forces, the alignment of planets or perhaps a prediction from the Mayan calendar, the ad world seems to be suffering from an amazing amount of seismic shifting.
...nature is super heating the traditional core of advertising; the ad agencies. They are being hit by a veritable tsunami of change; the heavy hand of procurement, the removal of the media function, marketing input taken up by consultants, the digital revolution and so on; so much so, agencies are now calling themselves “creative” agencies to try to stop the end of days
Quite an interesting viewpoint from the author - Paul Loosley, with 2 paragraphs that stood out for me - shown below. Interesting re his view of the ad agencies and one I have to say that I do agree with. But re the 2nd extract I don't want this blog to become a listing of all the negative press that marketing procurement get but it is funny that it seems the world over, the view is similar. Let's spread the positive word - we can help and we can make a difference (sermon over with !)
"Due to market forces, the alignment of planets or perhaps a prediction from the Mayan calendar, the ad world seems to be suffering from an amazing amount of seismic shifting.
...nature is super heating the traditional core of advertising; the ad agencies. They are being hit by a veritable tsunami of change; the heavy hand of procurement, the removal of the media function, marketing input taken up by consultants, the digital revolution and so on; so much so, agencies are now calling themselves “creative” agencies to try to stop the end of days
22 November 2009
Goings on this week
Two events that may be of interest this week
iris are hosting a Procurement Breakfast at their offices on Thursday at 8.30am. Guest speakers are Jane Dormer of Coke and Tony Squires of 4C. Contact Nicola Osmond (nicola.osmond@iris-worldwide.com ).
There is a M&M Briefing event also on Thursday looking at “When Should You Spend? Advertising Strategies in Recession and Recovery”. The event is sponsored by the FT and should have around 100 agency and marketer delegates attending. Contact emily@csquared.cc
iris are hosting a Procurement Breakfast at their offices on Thursday at 8.30am. Guest speakers are Jane Dormer of Coke and Tony Squires of 4C. Contact Nicola Osmond (nicola.osmond@iris-worldwide.com ).
There is a M&M Briefing event also on Thursday looking at “When Should You Spend? Advertising Strategies in Recession and Recovery”. The event is sponsored by the FT and should have around 100 agency and marketer delegates attending. Contact emily@csquared.cc
21 November 2009
Hot off the press
Just seen this blog posting from Blair Enns whose business is about how to win without pitching. He works closely with the DBA in the UK. Very strong views on procurement and how the venture into marketing procurement is not working. Worth a read.
http://www.winwithoutpitching.com/the-rise-and-fall-of-procurement
http://www.winwithoutpitching.com/the-rise-and-fall-of-procurement
Here we go - first ever blog!
"As I hurtled through space, one thought kept crossing my mind: Every part of this capsule was supplied by the lowest bidder." John Glenn, Astronaut
“The question remains whether the procurement process can successfully purchase creative services in the way door handles or raw materials are bought. The emphasis on procurement seemed to have started in the pharmaceutical industry and then moved elsewhere.” Martin Sorrell – CEO WPP
I thought it was appropriate to start off my first blog with a few quotes about procurement - the latter from Sir Martin on the wonderful world of marketing procurement that I work in.
The question that has been bugging me this week is why is there so much negative press about marketing procurement. There has been the recent article in Ad Age bemoaning the experience or the perceived lack of marketing experience of procurement folk. Do other industries and their trade mags see the involvement of procurement be it in the buying of travel or raw materials as negative ?
As with every role there are good people and there are some that perhaps may need some further training (happy to help of course!)- but it would be good to stop the negative comments and get the role and value that marketing procurement bring to agency relationships as positive and as natural in the marketing procurement sphere as the search and selection and media auditing companies. All suggestions welcome!.
“The question remains whether the procurement process can successfully purchase creative services in the way door handles or raw materials are bought. The emphasis on procurement seemed to have started in the pharmaceutical industry and then moved elsewhere.” Martin Sorrell – CEO WPP
I thought it was appropriate to start off my first blog with a few quotes about procurement - the latter from Sir Martin on the wonderful world of marketing procurement that I work in.
The question that has been bugging me this week is why is there so much negative press about marketing procurement. There has been the recent article in Ad Age bemoaning the experience or the perceived lack of marketing experience of procurement folk. Do other industries and their trade mags see the involvement of procurement be it in the buying of travel or raw materials as negative ?
As with every role there are good people and there are some that perhaps may need some further training (happy to help of course!)- but it would be good to stop the negative comments and get the role and value that marketing procurement bring to agency relationships as positive and as natural in the marketing procurement sphere as the search and selection and media auditing companies. All suggestions welcome!.
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